The following article provides summary analysis of two events last week hosted by WRI-IFC and IFC-EMPEA. The conferences dealt with the issues of green investment in emerging economies and the broader growth of emerging economy investment, respectively.

Sustainable SME finance is evolving from its status as an interesting trend to becoming a sizable sector in the future, but for now the investors involved in this area are a pioneering group,

searching out stable returns in unknown territory. That was the gist of last week's IFC-WRI workshop on sustainable investment in emerging economy green sectors.

Nearly twenty fund managers with investments in companies all over the world and in a variety of high-growth industries including clean technology and organic agriculture met on May 8^th to explore the opportunities and challenges in their work. These firms were generally divided between two dominant models, as revealed by a survey WRI conducted before the event. We found that firms operating in this sector are generally either local venture capital funds like Asia West that follow a traditional VC framework with a sector-specific focus or larger capital aggregators - U.S.-based hybrid-investment vehicles that use a variety of finance mechanisms to support their clients.

The challenges that were mentioned repeatedly in our funds survey were the same that arose in our event's roundtables centering on building the deal flow of sustainable businesses and fundraising for new investment models.

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